Who decides which communities benefit from federal funds? A new study by Anina Harter sheds light on this question, showing that membership on Germany’s federal budget committee increases the amount of federal grants flowing into a legislator’s electoral district. The paper, Legislative Institutions and Distributive Politics: Evidence from Germany’s Federal Budget Committee, highlights how legislative institutions can shape the local distribution of public spending.
The central research question is clear: Can members of the Bundestag leverage committee positions to direct federal funds to their own districts? This important question highlights the influence of institutional structures—not just party politics—in determining who benefits from federal spending. As public budgets come under increasing strain, understanding how these decisions are made and who benefits from them is more relevant than ever.
To answer this question, Harter collected a new dataset of 4,629 federal grants, worth a total of €3.2 billion, allocated between 1999 and 2023. These grants finance visible local projects such as the renovation of swimming pools, cultural monuments, and recreation centers. Unlike most federal grant programs, which are managed by public authorities, these particular funds are directly allocated by the Bundestag’s budget committee. This unusual setup makes them ideal for studying whether political influence shapes public spending.
The study uses a “difference-in-differences” approach, a method that compares how grant amounts going to a legislator’s district change after they join the committee, relative to districts whose legislators were not on the committee. This allows the researcher to isolate the effect of committee membership from other factors such as seniority, political connectedness, or regional economic conditions. In simple terms, it is a way to measure whether being on the committee itself, rather than other characteristics of the legislator, explains the additional funding.
The results are clear. Legislators who gain a seat on the budget committee see the average amount of grants to their district double compared to colleagues who are not on the committee. Over the course of a typical committee career, this adds up to roughly €2.6 million in additional local funding. The benefit is even larger for legislators who hold influential positions within the committee, such as party group spokespersons or rapporteurs who are responsible for relevant budget items. These members can secure up to five times more funding than ordinary committee members.
One notable finding is that this effect cuts across party lines. Members of both government and opposition parties benefit similarly from budget committee membership. The only exceptions are legislators at the political fringes. This pattern suggests that distributive politics in the Bundestag are not purely partisan but involve cross-party bargaining and reciprocal support.
The study also considers the role of electoral incentives. Germany’s electoral system mixes direct mandates (constituency seats) with party list mandates. One might expect that directly elected legislators have a stronger interest in channeling funds to their districts. Yet the study finds no significant difference: both direct and list-elected members benefit equally once they join the committee.
These findings have important implications for policy and governance. First, they raise concerns about whether federal grants are efficiently targeted, as political considerations appear to strongly influence funding decisions made by the budget committee. Second, the study highlights a lack of transparency: key data were only made available through Freedom of Information requests. While legislators publicly claim credit for securing specific grants, citizens lack a comprehensive overview of how federal grants are distributed nationwide.
The study’s relevance is timely. With final negotiations for the 2026 federal budget approaching and fiscal constraints tightening, the results underline how a small group of legislators can shape spending patterns. Understanding these dynamics is key for evaluating whether public funds are being allocated in ways that are fair, efficient, and transparent.
Harter’s research contributes to the broader scientific debate on distributive politics. Her study shows that in Germany’s parliamentary system, where parties traditionally dominate legislative behavior, committees play an independent and powerful role. Far from being mere instruments of party control, they emerge as central actors in the allocation of federal resources.
In sum, the study provides robust causal evidence that legislative institutions matter for public spending decisions. Members of the budget committee do not only oversee executive spending; committee membership is also a direct channel through which legislators can deliver resources to their districts. For policymakers, journalists, and citizens, the findings are a reminder that political influence on federal spending decisions deserves closer public attention.
About the Author
Anina Harter
PhD candidate in Economics at the Hertie School in Berlin, Germany. Previously, she worked in the Office of the Chief Economist at the European Bank for Reconstruction and Development in London and at the ifo Institute. Her fields of interest are Applied Microeconomics, Political Economy and Public Finance.
